Aug 9, 2008

Business - Airtel,Vodafone have 3G edge over other players

Vodafone’s expertise in 3G and Bharti Airtel’s partnership with SingTel may them take lead over other operators. While Bharti Airtel will roll out its 3G services in Sri Lanka by year-end, thus having a six-month lead to test its services, Vodafone will look to bring its global 3G expertise to India.

While Bharti Airtel has already launched 3G in Seychelles, Jersey and Geurnsey, Vodafone is credited with rolling out 3G services in global markets like the UK, Germany, New Zealand, Australia, Spain and others. On the other hand SingTel, which owns a little over 30% in Bharti Airtel, is a major player in the 3G space as it has already rolled out such networks in several markets across Asia.

Bharti Airtel will also have a six-month advantage of testing its 3G services in the region as it rolls out services in Sri Lanka by December, 2008. Bharti Airtel plans to rollout 3G in India by mid-2009 only. Both Vodafone and Airtel may import their successful products and applications to India.

“We just gave the request for proposal to Ericsson and Nokia for 3G networks in Sri Lanka,” Bharti Airtel president for mobility Sanjay Kapoor told ET. “Most of the content will be Sri Lanka specific, but we can also share some content from our operations here. Over the last year, a bulk of the deals we have entered into with content developers have been done keeping 3G in mind. So most of this can be extended to our 3G platform easily,” Mr Kapoor added.

In contrast, Vodafone marketing head Harit Nagpal said that Vodafone has already rolled out 3G services in Egypt, parts of Africa and Turkey—markets similar to India. “With a global subscriber base of 280 million, Vodafone’s 3G expertise is unmatched. We have the capability of handling migration of customers from 2G to 3G in markets like Egypt and Turkey. We will also see such migration in India. Moreover a strong leadership presence in metro cities, will give us an advantage over others,” he said.

Interestingly, Vodafone and Bharti Airtel are competitors in India, but this has not stopped the companies from extending their alliance to markets abroad. Jersey Airtel and Guernsey Airtel, subsidiaries of Bharti Enterprises, last year entered into an agreement with Vodafone to jointly offer telecom services in Jersey and Guernsey (islands in Europe, close to UK). (Bharti was granted licenses to operate 2G and 3G mobile services in Jersey and Guernsey in 2006.)

While the two rivals have partnered globally, they may not replicate the same model in India. Meanwhile, Bharti Airtel and Vodafone will begin selling the new generation 3G-enabled iPhone from August 22. This will also give them an additional edge over other operators.

Bharti and Vodafone, which account for a significant number of the high ARPU (average revenue per user) subscribers in India, will have a further edge as a large segment of their high end users already have 3G compatible handsets.

Interestingly, the move to partner Airtel and Vodafone marks a major shift in Apple’s global strategy of ‘one country-one operator’. With India emerging as the fastest-growing cellular market, Apple wanted to maximize its exposure here as Airtel and Vodafone have a combined subscriber base of over 120 million.